Simple Steps for leading a Financially Healthy Life – Some deep insights

Do you feel like there is not enough to cover basic necessities and have the opportunity to invest in the future? The reality is harsh because so many people aren’t compensated fairly well to even survive, much less to put meager amounts towards financial goals.

To overcome this situation you have to know the secret behind leading a comfortable financially stable life and receive the gift of financial freedom.

You’ve come this far to take that one step which leads you to financial stability. Let’s find out how to be financially stable and what is financial independence.

Why Should I Be Financially Stable? What is Financial Independence?

What does it mean to be financially stable?

Before we get all technical and through with how important it is to be financially stable lets’ define exactly what it is-

“Becoming financially stable means that my family and I have all that we need to thrive now and in the future. By “thrive” I mean, beyond the basics, I want to have enough to cover things like vacations and educational experiences that will help my family and me live fuller and richer lives.”

The answer may vary from a bachelor, a single mom or a family of four, hence it has a different meaning for different people.

Why should you be financially stable?

Because you don’t need to worry about paying off your bills and debts every time they hit the ceiling and you feel confident with your financial dilemma. Having money saved up for the future and storing cash reserves for an emergency fund is absolutely important.

What about financial independence?

Financial independence is the exact moment when your investments start paying more than the expenses you’re being incurred. At that moment you don’t need to worry about paying rent or work for a living.

Do you have the desire to get there?

Why is financial stability important in a relationship? Why is the term financial stability assuming significance?

Even healthy relationships are prone to issues, it’s quite natural. A perfect marriage or a healthy relationship can be a victim of a catastrophic downfall if there is less or more money.

I mean yeah, love is the key to a relationship but it is blind in the initial stages. As you start living life, you’ll know the adjustments and sacrifices you have to go through.

A stable and steady income is necessary to chalk out a budget if both partners are working. Hence to manage all those hard times by planning ahead the term financial stability is assuming significance in a great way.

Why Should I Pay close attention to lead a Financially Stable life? What are the benefits of being financially stable?

You definitely don’t want to live in a financial hole that can leave you in a fit of devastation. Let’s look at some of the benefits of getting your financial act together.

1. Less Stress and Better Health

73% of people believe that money is the number one factor playing their stress level. And we all know how unpleasant it is to have persistent stress level, in fact, it’s deadly.

By taking the necessary steps to gather your finances in order, you might add some great quality years without suffering from physical ailments like heart disease, stroke, depression, and even obesity.

2. Better Marriages

As I pointed out earlier, money can be an obstacle to a healthy relationship. It can cause inevitable problems like pointing fingers and blaming each other instead of working to fix the problem together.

3. More Options in Life

People who are weighed down by heavy debt are slaves to their debts due. If you commit small sacrifices now, it will empower you by giving you choices to make a change in career or have more flexibility in your children’s education.

4. The Freedom To Be Generous

If you’re financially stable you’re going to have more margin. You don’t need to live beyond your means. It’s a wonderful thing to be able to support others and when you have the infinite means of being generous then it’s all the better.

5. More Financially Stable Kids

Kids who breed in the functionally well home have a culture of financial literacy and accountability. That has a higher chance of having financial freedom in their own adult lives.

Do I Need to Develop Any Habits for Achieving Financial Stability and Success?

Adopting sound financial habits will help you improve your savings, financial stability and success in the long term. So let’s see some of the good financial habits to achieve your goal-

1. Make Saving Your Top Priority

Saving must always be your topmost priority when you don’t have a stable source of financial funds for emergency backup.

The advanced technological developments in banks have invented various means where automagical saving funds automatically deduct the saving from your account each day.

2. Don’t Be An Impulsive Spender

No offense but this is the biggest problem among many of us, even though I was a shopaholic back in my teenage years. Impulsive spending on eating, online buying and shopping is a huge no if you want to become financially stable.

3. Evaluate Your Expenses

Listing down your expenses and spending each month can cut down abnormal costs which are unnecessary.

Using a budget, Bills and Finance Tracker like Mint, Money Manager which helps you keep track of your day-to-day expenses and incomes. I personally prefer the Money Manager app which is amazing.

4. Invest in Future

If you have begun your investment in your early 20s, the growth will amaze you at your retirement age. There a myriad of options for you to invest in. you can also go for an IRA as well as buying shares and stocks.

5. Avoid Debt as Much as Possible

If you don’t want your finances to go down the drain, you have to work on the debt elimination plan. List all the debts from top to bottom from the massive one to the smallest one. It helps you keep track of money and avoid debt.

What Are The Steps To Leading a Financially Healthy Life? Will It Work?

Let’s assume you’re one step away from insolvency or might be there already, now it’s time to start making changes to your lifestyle. Let’s go through some financially healthy habits that you can employ in your life

1. Runaway From The Credit Card

Yes, running away from the credit card is the only way you’ll find if you want to save and invest in the future.

Ask yourself whether it is important in securing your long term fiscal health buying a new $100 shoes just because your friend has one!

2. Inflate Your Emergency Fund

A storm day fund will be your insurance policy against emergency bills, like sudden healthcare bills, damage to your property, or any unplanned travel. Keeping at least 6 months of living expenses as a cash reserve is a safe bet.

3. Retirement Saving Habits

Save for your retirement like building a muscle, a bit every week. Set aside money for retirement starting now, whether through an employer-sponsored program or an IRA. That way you’ll have a bounty of reserve when you retire.

4. Budgetary Workout Plan

The budget is like a diet for your financial situation. To ensure financial stability gets into the habit of making budgetary plans so that you’ll know exactly how much to spend and not spend just like a diet.

5. Skip Get Rich Quick Schemes

The odds to get rich by winning the lottery are millions to one, so don’t sweat or lose weight trying to get a jackpot and hope that one day you’ll own a Lamborghini. Take time to build your savings and having a reduced debt must be your goal for now.

How Do I Measure My financial Stability? Is it measurable?

Financial stability cannot be measured by income, bank balance or property as the person holding the lowest level of income can also be financially stable. But it can be measured in the following parameters that I’m about to list out-

1. When You’re Happy With Your Financial Condition

When your financial condition brings you pride and joy instead of unwarranted panic and distress. If you’re running like a chicken every month to pay your dues then you must get it under control. It means you’re not financially healthy.

2. You Don’t Need To Argue With Your Spouse About Monthly Budget

If you don’t have a landing argument with your spouse every morning then consider it as a warning bell that your financial condition is not better.

But on the other hand, if you and your partner both are satisfied and content with the money you possess then you have attained financial freedom.

3.When You Use Credit Card Rarely

Every wallet has a card commonly right? We can easily measure our financial stability using the extent we use our credit cards.

If you are in the habit of using credit cards very rarely and pay them off quickly in the next month itself then your financial health is perfectly sound.

4. When You’re Ready For Financial Emergencies

If you can handle urgent situations like medical emergencies, instant travel, a potential job loss and so on which can create immediate panic then you’re financially fit.

5. Festivals Don’t Brew Worries

My friend used to borrow money in order to celebrate a festival or to buy an anniversary gift, birthday gift, etc. You seriously have to attain financial stability if you’re stagnant in this situation.

6. Save Money Without Stress

If your financial condition doesn’t involve forcefully saving some money along with making both ends meet, then you’re in trouble. If you habitually save money then your financial condition will be improved.

How to Practically Set the Financial Goals And Actually Meet Them?

Financial situations can push any of us to extreme worry and anxiety. Here are the 6 effective steps to set your financial goals:

1. Make a Budget And Live By It

Many of you are skeptical of the budgeting process. But I’ll tell you budgeting will open your eyes. Because it will help you understand how to afford and make the most of buying and investing. Experts agree that the budget is useful.

2. Pay Off Credit Card Debt

If your credit balance is $1000, you must pay the amount before the month-end or else you have to pay interest on the initial amount which can scarily pile up to the huge charge that can eat up most of your cash flow.

Once it starts creeping up, you’re not far from saying “My God, I’m $ 200,000 in debt!”. If you can’t seem to fight it off yourselves try some credit consolidation with a reputed company.

3. Save An Emergency Fund

Our economy and the market condition is extremely fragile, hence having at least 3 months of your salary as liquidity is standardly safe. Six months or more is much better.

4. Try To Live Below Your Means

If you lavish more than your income it becomes a debt, if you spend less than your income there is money in the bank. Not a complicated math equation right?

5. Develop Skills To Improve Your Income

Getting into additional training or responsibility at your current age is always a good option. Find a mentor who is exceptionally good at giving tips and feedback.

How Do You Maintain Financial Stability? As Per The Latest Research

Maintaining financial stability is easier said than done, it’s not an egg suited for everyone’s basket. Explore some of the ways you can sustain your growth –

How do I know if I am financially stable? Are there any special techniques?

People have different thoughts on what exactly being financially stable is. But you can watch for telltale signs that I’ve outlined below.

If you agree and say yes to most of the statements below then it’s a great sign.

You’re at peace with your current financial situation

You don’t fight over money with your spouse

Got lost of emergency funds

A job loss suddenly won’t make you stop paying your bills

You’re okay to spend money on special occasions.

Do You Recommend Any Books To Read on Financial Independence? Will It Be Handy?

Reading books gives you the knowledge, wisdom, and experience gleaned over thousands of lifetimes. Start with following a blog which is a great thing.

But if you’re like me who enjoys the feel and the whiff of a book in your hands then add all those to your bookshelf or an e-book shelf.

1. Your Money Or Your Life – Vicki Robin

This amazing book focuses on the psychological side of financial independence. It will help you to develop better values and habits. The strong takeaway on this book is you have to decide whether the purchases you make are worth it.

2. The Millionaire Next Door – Thomas J. Stanley

This book changes the way you think about millionaires. After reading this book the idea of becoming a millionaire yourself someday seems more reaching than before.

3. Building Wealth And Being Happy – Graeme Falco

This book is mainly directed towards younger generations and millennials on how to live in a world of financial challenges. The thing I liked about this book is, it addresses the practical question which other books don’t seem to cover.

Such as renting vs buying, the future of jobs, social responsibility and how they can influence your investment strategy.

4. Early Retirement Extreme – Jacob Lund Fisker

This book attracts people who love to lead a self-sufficient lifestyle, and it’s worth the read. It designs your life in an intellectual way.

5. The Simple Path To Wealth – J L Collins

This book depicts how the stock market works and the various types of retirement accounts. It helps you to choose a good asset allocation and to bring down the cost of what you pay.

In A Nutshell

Financial stability basically depends on numerous things. To get the maximum benefit from your finances this is the key to make sure whether the money is laboring for you or not.

Ultimately being able to do what you want, whenever you want and that too on your own time and effort means you are financially healthy. When it comes to money be relentless and prioritize to save it first.

To follow all these steps may take a lot of effort but believe me it’s worth it!

FAQs

1. Why is financial stability important?

Financial stability is important because it denotes a sound financial factor in ensuring that the relationships are happy. It is the pillar that holds a family together.

2. How much money is considered financially stable?

According to the research, the well of 11% of people definitely agreed that earning $60000 dollars or more makes you financially secure.

3. How can I be financially smart and free?

You are considered to be financially free and independent when you have the ability to live comfortably off one’s savings and investments with no debt whatsoever.

4. Will I ever be financially stable?

Becoming financially stable requires tremendous patience and diligence. Just start working on saving your money, paying your own debt and controlling spending your money then you’ll not be far off from being financially stable in the future.

5. How is financial stability measured?

Financial stability has different meanings for different persons. The first sign of measurement of a healthy financial situation is when you are happy with your financial conditions and no longer need to panic or worry about taking care of emergency costs.

How are you planning to lead a financially stable life? Which one of the above steps are you going to implement? Please tell us in the comments section.

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